“I will continue to act to ensure that household debts are sustainable, that lenders are acting prudently and that increases in interest in rates or a housing market downturn don’t put at risk the economic growth we are working so hard to accelerate,” said the Federal financial minister of Canada Bill Morneau after taking so many actions to restrain the Canada’s rising bubbles.
Monteau made a statement last fall to the Toronto Trade Board saying “let me be clear, at the end of the day, I am ultimately responsible for supporting financial security and the stability of the financial system.”
That statement proved that instead of shying away from problems like most 21st century politicians do, Monteau decided to face and tackle the problem e.g. raising the minimum down payment for home priced higher than $500,000 to serve as a reassurance to Canadians that what happened to the U.S. won’t happen to Canada and his actions proved he had authority over the tactics deflation of Canada’s housing bubbles.
But after the boldness displayed on the day of his meeting with the Toronto trade board, Monteau showed little or no interest anymore; Vancouver’s housing real estate mania has spread to Toronto and debts are becoming more piled up than they were and its bringing more alarming.
Investing in an independent body with the power to respond to financial threats has been the advice to the Federal government of Canada for years from the International Monetary Fund.
Seeing politicians not ideal to control a country’s economy as to raising interest rates fast enough to control inflation, it’s now seen wise to separate the legislative and executive arms of Government from the Central bank.
Rather than hand the job of how to manage and keep an eye on the market to technocrats like the U.S. did after their crisis a decade ago by creating a committee of agency heads led by the treasury secretary, and also like U.K. did by handing the powers to the central bank, this still neither moved Monteau’s predecessor nor Monteau himself.